The International Monetary Fund said Malaysia’s economic growth should remain solid this year, an International Monetary Fund (IMF) team, headed by Alex Mourmouras, said.
At the conclusion of 2015 Article IV Consultation with Malaysia, Mourmouras said Malaysia’s economy continues to perform well, although growth has slowed down and downside risks predominate.
GDP growth is forecast to slow to around 4.4 percent in 2016 from an estimated 4.8 percent in 2015. Activity should be underpinned by healthy, albeit moderating domestic demand but constrained by weak external demand, Mourmouras noted.
“The external environment for 2016 is shrouded in uncertainties, owing to a confluence of factors that include the global and regional trade slowdowns; China spillovers; the continued strength of the US dollar; and the uneven strength of activity in Malaysia’s other trading partners,” said Mourmouras.
Headline inflation is expected to rise temporarily in 2016 but core inflation is well anchored, and central bank’s current monetary policy stance is appropriate, the IMF said.
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